What’s Wrong with iTunes? Is It the iPod…Or What?

Last week it seemed pretty apparent that the Scandinavian countries were going to gang up on Apple because of its iTunes service violating consumer laws. But the deadline has been extended.

Reuters reported that consumer-rights protection agencies in Denmark, Norway and Sweden have set the deadline for Apple at August 1 to respond to their claim. These countries, like France a couple months ago, think that customers that legally purchase iTunes music should be able to enjoy their songs on any digital music player. Since Apple is highly protective of its iTunes, the company currently will not relinquish its digital rights and allow iTunes to be a universal product. Hence, their policy is a disadvantage for the consumer.

Marlene Winter, Denmark’s National Consumer Agency representative, told Reuters that she knows her Norwegian colleagues are prepared to take the issue to court.

“If they get a ruling in Norway it will be very interesting for us because our consumer laws are so similar,” Winter said. If the court rules that iTunes does violate the Norwegian marketing laws, Apple’s punishment could be fines and a requirement to shut its Norwegian site. The countries want Apple to strip the blocking software from its iTunes service.

Meanwhile, protests have begun cropping up in the United States, according to other news reports. A group called DefectivebyDesign rallied demonstrators at eight Apple stores across the country last Saturday, including the company’s new 24-hour store in Manhattan. Wearing hazmat suits, they hoisted signs and handed out leaflets calling for Apple to stop using the blocking software.

Apple currently controls about 80 percent of the downloadable music market in the United States and the United Kingdom, and about half the market in Europe. Apple still can be very profitable because of its interoperable software no matter what the outcome of the court cases.

So far, Apple has shown no intent to back down. While reports said it looked forward to resolving the issues in Norway, the company responded to French regulators with a threat to pull the French version of its iTunes service out of the country. Apple added that, in its opinion, the legislation there was little more than “state-sponsored piracy.”

To some analysts, the question for Apple is whether keeping the copy protection is worth the bad press and the regulatory headaches. Credit Suisse analyst Robert Semple noted in a research report on Apple last month that “Europe remains the biggest opportunity for Apple.”

And yet Apple’s copyright laws are not as rigid as they seem. There are ways to maneuver around the DRM laws, although they take some extra steps. You can buy your iTunes, burn them onto a CD, and then upload them into another player. But this is too much work for many who don’t have the tech savvy (or let’s admit it, are just too lazy) to bother.

A news story about the iPod would not be complete without at least a mention or update about the Apple-Creative battle over the iPod for patent infringement. The United States International Trade Commission voted to institute an investigation of the iPod this week, according to PRNewswire.

Creative’s side says that the iPod infringes on the user interface portion of the “Zen Patent.”  Creative has requested that the ITC issue a permanent exclusion order and permanent cease and desist order. By instituting this investigation (337-TA-573), the ITC has not yet made any decision on the merits of the case. Talks between the two companies date back to before Apple first introduced the iPod.

So is this just another case of tech companies fighting to gain that competitive edge? Seems like the bigger they are, the harder they fall.